Apple's Not-So-Good Week

If Dell's experience is anything to go by, you really don't want Carl Icahn taking an interest in your company. Oops -- that's just what Apple is experiencing now. Between that, Larry Ellison's comments and the ongoing e-book pricing saga, this wasn't the best week in Cupertino. Fortunately, there's still Sept. 10 to look forward to -- and maybe Oct. 25 as well.

Uh oh, Apple. Carl Icahn -- the activist shareholder and spoiler of many corporate deals, the latest being Dell's
attempt to go private
-- has announced to the world that he has amassed "a large position" in your stock.

This news came via a tweet from Icahn on Tuesday afternoon, touting not only his position in Apple but also his belief that the company is "extremely undervalued."

Icahn is notorious for his hard line on what he believes is a proper value for a company. Consider the battle under way at Dell to go private. Michael Dell has been trying to close this transaction for close to a year, only to be stymied by Icahn and a few other shareholders who say the offer undervalues the company -- even as a special committee set up by the board of directors has said, not once but twice, that Dell's offer is the best out there.

Dell seems to be heading for victory, though, and only just in time, as the company's prospects continue to dim.

Not that Icahn is likely to play the role of spoiler in any Apple transactions, at least not right now. For the moment it appears Icahn's interest in Apple is merely to prompt the company to offer a larger stock buyback.

This is not the first time an Apple shareholder has grumbled about Apple's cash hoard: David Einhorn of Greenlight Capital voiced similar complaints earlier this year, leading eventually to Apple's US$100 billion buyback program. Now Icahn says that is not enough.

'He Was Our Picasso'

Icahn's investment is newsworthy in part because it touches on the now-perennial issue of whether Apple can continue to be
innovative. It's a theme that pops up even for seemingly unrelated news like the scoop by All Things D this week that Apple has scheduled its next iPhone debut for Sept. 10.

Why, some people wondered -- OK, that was
me
-- was Apple holding such an event in the middle of a tech-heavy news cycle? Could it be it just wants to get "lost in the crowd," so to speak, because it doesn't have anything startlingly awe-inspiring to reveal?

To hear Oracle's Larry Ellison speak, one might think so, at least based on comments he made on CBS This Morning on Tuesday. Apple's best days are behind it, Ellison said, now that Steve Jobs is gone: "He was brilliant. I mean, our Edison. He was our Picasso."

Like I said, Apple's ability to continue its innovation has been a question hashed and rehashed since Jobs' passing in 2011. Icahn's investment, though, kicks the debate up a notch -- or, perhaps, put another way, brings Apple down a peg or two.

Icahn is not one to romanticize a company or hold in reverence such airy-fairy notions as innovation, customer experience or quality. For Icahn, Apple represents cash -- nothing more, nothing less.

How long will it take the rest of the tech community to follow suit?

The iPhone 5C

Meanwhile, of course, the release cycle must continue, and we have Sept. 10 to look forward to.

Another date is floating around as well, in fact -- Oct. 25 -- and more than a few publications are speculating that this second date signals the upcoming release of the iPhone 5C, a cheaper device that might even retail for as low as US$99 per unit.

Oct. 25 would also put the
iPhone 5C
out in time for the all-important holiday shopping season. "C" might stand for cheap, but it could also stand for color -- as in bright red, blue and green. Leaked photos purporting to be the 5C suggest that will be its color motif.

I thought and thought, and couldn't come up with a "C" word that suggests international markets. Yet that is the other theory about the iPhone 5C: It will be key to Apple's play to penetrate emerging markets, especially China. Just in time, too -- with Icahn as a significant investor, Apple had better make sure its cash keeps flowing.

E-Book Pricing

Apple's not-so-good week was set off by not one but two favorable developments involving the International Trade Commission -- briefly, its ban on some Apple imports was overturned, and then it ruled that some Samsung products would be banned for infringing on Apple products.

Unfortunately, Apple is on the losing end of another legal battle -- the antitrust case it lost with the Department of Justice over its e-book pricing. Five major book publishers are
protesting
that the proposed relief would hurt them as well because it kills the agency model for selling e-books.

Of course, as my colleague John P. Mello Jr. recently noted, the agency model for selling e-books is what got the publishers in hot water with the DoJ in the first place. The agency model also helped place Apple in the market for e-books, a space once -- and still -- dominated by Amazon.

Erika Morphy has been writing about technology, finance and business issues for more than 20 years. She lives in Silver Spring, Md.